Are You Thinking What I Was Thinking

February 17th, 2017
  • In all the nonsense about fake news, are we really saying the audience is permanently stuck second-guessing themselves or the decisions that they are making are not our preferred ones? (Brexit, Trump etc.)
  • Is there anything more unappealing than awards events, where people who have been successful in a singular profession and insulate themselves from the real world are suddenly “experts” on geopolitics, leadership, social issues and so on?
  • No one knows what the Trump presidency will have in store for us but the sun will rise and set each day, businesses around the world will trade with each other and culturally diverse communities will continue to interact. Perspective is more important than ever.
  • Watching the first 10 minutes of Bridget Jones’s Baby is a reminder that gratuitous use of swear words, displays a startling lack of intellect and a sign in neon lights to “move on”. The shame is the movie ending is worth watching but I wonder how many people stuck around.
  • Why do celebrities post naked or near-naked pictures of themselves on their social media accounts? If their objective is to protect their privacy, aren’t they throwing fuel on a fire that they have limited prospect of controlling?
  • Why are we “shocked” when a politician (Andy Puzder), a celebrity (David Beckham) or a business executive’s (Vice-Chair of Samsung) leaked private messages doesn’t caste them in a flattering light? They are normal human beings with the very same weaknesses and insecurities, prone to making dumb decisions.
  • The word “great” in business, science, sport, culture and so forth is so abused when describing individual performance that moments like Tom Brady’s Superbowl climax quickly become yesterday’s news.
  • If Americans needed reminding of why infrastructure spending is a priority take a walk through JFK, LAX or Miami airport and compare the experience with that in London Heathrow, Schipol, Dubai, Hong Kong or Shanghai.
  • Do CEO’s shop their own business on a sufficiently regular basis? Here in the UK, the major banks’ knee-jerk response to internet banking has been to slash the number of branches and make it exponentially more time-consuming for their customers to perform routine tasks (cashing a cheque). It is hard to see how that is in the customers best interest?
  • There is another high street presence, which is on a “life support machine” as societal mores change and the internet disrupts the sector. Thousands of bookies or sports betting shops solely exist on high-stakes fixed odds betting terminals preying on the most vulnerable members of society. In a town of 40,000 people there might be 3 or 4, thirty years ago, today in a deprived square mile of an inner city, there is probably 25 shops.

© James Berkeley 2017. All Rights Reserved.

Interview With Me: Forbes

February 8th, 2017

Forbes contributor and former Reuters reporter, Ralph Jennings, interviewed James on the discrete “welcome mat” likely to be laid out by the Trump presidency for ultra high net worth Chinese entrepreneurs directly investing into the United States. Politics aside, expect pragmatism to prevail.

Why Trump Will Let China’s Smart Elite Invest In The U.S. 

http://www.forbes.com/sites/ralphjennings/2017/02/07/trump-is-open-to-investment-from-chinas-smart-elite/#4a7d1a135fcb

Social Media: The Investors Perspective

February 1st, 2017

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I get asked by investors about the role of social media in stimulating the profitable growth of mid-market business-to-consumer and business-to-business targets seeking growth capital. My default response is ‘why does someone want to share their video, tweet, blog? Then, how does it help them (entrepreneur) and you (investor) achieve your goals in the next 12 months?’ If you don’t have a compelling answer to that question, it is probably a waste of time and going to have zero impact on the firm’s growth. Review any YouTube, Twitter, Instagram or Facebook listing of most popular videos, tweets, images or blog posts and there is always that one thing that made people share it. That is the secret sauce. The son of one of my old bosses, Sam Tsui, an American songwriter, has had incredible success attracting 2.5 million subscribers to his YouTube channel. Sam is talented (Yale-educated). He possesses a great voice. He has learned to leverage the medium with great effect (singing duets with himself) in order to create a strong brand.

However, sharing alone is insufficient for Sam and the businesses I describe because there is no taste or noise filter, think of profane rants from soccer fans, product disasters and compromising personal photos, dressed up as “comedy” or black humour.

There needs to be a “gravity” pull for your target audience and a reason to keep returning. That requires volume, value and consistent messaging (“VVM”) to create engagement. Paid promotion works to raise “conscious” awareness of your product or service for a millisecond but it does little to stimulate someone to act (subscribe, make the call, visit the store, buy). So long as you put the marketing investment in the appropriate context, there is little to worry about but you must be willing to be intellectually honest about the results.

© James Berkeley 2017. All Rights Reserved.

 

A Racing Certainty

January 23rd, 2017

In a letter to the Editor of the UK’s leading horse racing daily newspaper, Racing Post, James points out that without a “profitable growth” mindset and an investment alternative that reflects it, the industry is accepting certain decline. There is no “plateau”. In this case, The Jockey Club has chosen to sell a profitable business and an iconic racecourse, Kempton Park, for housing development under the smokescreen of further investment in the sport’s “new heritage”. What is really happening is a lack of vision, a lack of bold new ideas and a lack of leadership.  Yet that doesn’t have to be the case, if racing’s rulers want to leave a meaningful legacy.

“Seeking Private Investment” 

170114 Racing Post Ltr1

© James Berkeley 2017. All Rights Reserved.

 

 

Startup, Startdown

January 23rd, 2017

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Are you taking advice from an experienced entrepreneur as you proceed (business growth, raising capital, building partnerships and so forth)? Have they done what you want to accomplish successfully? Can they translate and transfer their expertise, knowledge and contacts to me? Never hire anyone who you cannot confidently answer a firm “YES” to those questions. There is a huge cottage industry of fawning advisers, business brokers and connectors, prying on startup and early-stage entrepreneurs with lousy and unproven advice. A great many entrepreneurs are drawn to these individuals by people they assiduously trust (family, friends, past colleagues and so on).  The giveaway is a promise to introduce the entrepreneur to a “celebrity” investor, adviser, potential client etc. The entrepreneur signs away a monthly retainer, and lo and behold they are taken on a merry ground, laced with excuses and failure. There is close to zero commitment because the economics don’t justify it.

You are building a “start-up”. Make sure that you are not consciously or unconsciously now in a “start-down”.

© James Berkeley 2017. All Rights Reserved.

 

Why Should They Care?

January 19th, 2017

I hate being “pitched” ideas, it immediately feels like my interests (building a trusting relationship) are being subordinated to advance your interests (line your pockets). Yet we all need to attract ideal customers or investors with a memorable description of our impressive value. How else can they recall when they need your product, service or proposed investment? You need a clear crisp 1 or 2 sentence statement. It needs to embrace:

  • Legitimate immediate value
  • Impressive results from its’ application and use
  • Improved performance, not problem solving
  • Your target audience’s aspirations
  • It needs to be specific, not too general

It is not about your approach, technology or ideas. Nor is it a sales tag line.

“We have created a platform to resolve the shortcomings of wealth managers, who put their interests before their customers” is interesting but it tells me little about what is really in it for me.

Contrast this with “We dramatically improve HNW investors’ performance, security and peace of mind in complex and ambiguous situations”, which begs the immediate question “great, tell me what would you suggest in this situation?” You have given the other party a reason to care about you (their self-interest), to immediately delve into a pragmatic not conceptual discussion and to recommend you to others.

© James Berkeley 2017. All Rights Reserved.

 

Hot Airbnb

January 10th, 2017

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A rocket-propelled growth trajectory creates a “siren call” to investors and garners predictable and less predictable media comment. Executives ride the bandwagon of super valuations (fame, inflated bonuses, celebrity) but all too often the focus on dramatic market expansion and top line growth outpaces risk mitigation initiatives (the boring stuff). Heat melts the shell of the rocket on re-entry and the business becomes highly vulnerable.

This past week, Airbnb came in to sharp focus with me. (1) A European CEO of a “bricks and mortar” global serviced apartment business pointing out that Airbnb is flagrantly allowing its’ hosts in many key European gateway cities to run full-time hospitality businesses (83,000 room listings in Paris) and (2) Personally experiencing their underwhelming response to a cyber hack on my own Airbnb account.

My observation is Airbnb are playing too fast and too loose. They are tripping up on common sense responses to foreseen risks (cyber hacks, hosts flouting local trading rules), not just unforeseen risks. I don’t believe they are alone, there are hundreds of “celebrity” high growth businesses, whose risk mitigation strategies are being lapped by their growth plans.

I am all for disruptive businesses helping raise the levels of customer service. That is capitalism. No business or industry has a “right” to survive. What isn’t acceptable is when a business is acquiescent or adopts approaches (cyber hack) that are so inadequate that trust and integrity is destroyed. Are management asleep while cyber thieves roam freely in their booking system, setting up fake bookings, lifting credit card information, conversing brazenly with hosts and potentially putting “hosts” in physical harm’s way with bogus guests? Are their customers solely responsible for alerting Airbnb to breaches and mitigating the immediate risks (financial theft, loss of personal data, potential physical harm to hosts)? Should  this matter to investors?

Yes, if you are an investor for whom reputational risk is equally as important as financial risk.

There are plenty of disruptive businesses (Ryanair), where executives have assailed their competitors, regulators and their customers for years while the growth trajectory dramatically outpaces the risk mitigation strategies.

The difficulty arises when growth slows, investors ask “why”?

Businesses aren’t in existence to be liked, they are in business to be respected. If you don’t believe that look at Apple, GE, Singapore Airlines and Virgin. When respect is destroyed by leaders failing to prioritise managing risk effectively, customers, shareholders, employees and business partners walk. No one individual or brand is insulated from that certainty.

© James Berkeley 2017. All Rights Reserved.

Investor Accountability

December 16th, 2016

“What is the one action I have undertaken today to positively nurture our investment pipeline?”

If you want to continually stay on an upward investment curve, it comes down to simple things: individual accountability within an investment firm. Whether you are a HNW individual, a Family Office direct and co-investing, a private equity or venture capital fund manager or an adviser deploying your own and others money, it doesn’t matter.   Be intellectually honest and answer the question, before you leave your office.

© James Berkeley 2016. All Rights Reserved.

 

Compelling Investors

December 15th, 2016

“Please feel free to share investment opportunities in the future….” or “This isn’t right for us at this stage we have a prefer businesses with positive EBITDA” The problem with so many investors is there is no “siren call” to them. Their language is weak, their feedback is meaningless, and there is visibly close to zero commitment to a future relationship with the introduction source. In return, there is no compulsion to make you THEIR priority. To put you at the top of their call list. To keep you uppermost in their thoughts. To reciprocate, in a meaningful manner.

If the game is about identifying, attracting, evaluating, and applying impressive levels of knowledge to high-quality investment opportunities and making wise decisions consistent with an investor’s strategic goals, there is a need to constantly nurture referral sources. You don’t achieve that with bland throwaway sentences or anaemic feedback. You do that best by providing something of value to the introducer quickly (ideas, insights, other investor names, a promotional opportunity and so forth). Of course, that assumes your real intention is to have an ongoing relationship and not banish the referral source to Siberia.

© James Berkeley. 2016 All Rights Reserved.

Stanford for Start-Ups

November 8th, 2016

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“There is nothing special about Stanford, everyone around the Bay Area tech scene has been there”.

Those were the throwaway words from a West Coast adviser, when I first mentioned that I had been asked to speak to this year’s class in Stanford’s Continuing Education program. Of course, those comments were directed to the university students, not the global audience of largely mature students and entrepreneurs enthusiastically engaged in a discussion about capital raising. Here is my findings from a really informative session:

  1. The dynamics of raising money at any stage are largely similar but the consequences vary immensely. When less than 25% of seed-funded startups fail to get to the third funding round (they have died, been acquired or are self-sustaining), many entrepreneurs overlook the importance of building and nurturing really strong personal support systems. Family, friends and wise counsellors, who have your best interests at heart, are willing to provide frank solicited advice and a supportive shoulder, when it doesn’t work out.
  2. The in vogue buzzwords are “agile money”. I prefer to talk about “resilient money.” Finding investors sufficiently agile to adapt to your changing needs is helpful but finding those that are sufficiently resilient in the tough and the good times, is really the gold standard.
  3. More than 80% of the class are positive about tech investment in the next 12 months and don’t believe we are in a tech bubble.
  4. Students often ask tougher questions of themselves than serial entrepreneurs. “How do I give myself the best shot at being a successful entrepreneur?” Perhaps it is the desire not to repeat others mistakes or the willingness to readily invest in improving their own skills, behavioural traits and expertise. Too often the mindset flips for the entrepreneur in the real world, “let’s save every cent”, when investing in their own personal needs (mentor, coach, advisor) is critical to their success.
  5. More than 60% are intrigued by corporate venture capital but certainly not beholden to its’ charms. Great question, “Why are corporate businesses suddenly experts in startup investing?” Many believe that CVCs remain highly susceptible to short-term changes in executive decision-making.
  6. Entrepreneurs learn best when they are willing to be vulnerable. In our case, to jump into the role play seat with little preparation and test their abilities to direct the conversation with an investor towards their desired goal.
  7. Understanding the distinctions between public and private investors such as a traditional VC Fund, a Family Office and a Corporate Venture Capital fund requires thinking about the future, not just the present or the past. What are their highest potential future needs? How are you uniquely qualified to address those needs?
  8. We over estimate geographical differences. A multi-lingual global audience of 75 entrepreneurs drawn from 5 continents, brought together by a singular objective, to learn the shortest quickest route to their desired objectives.
  9. Technology won’t replace “in the classroom” learning but tools such as Zoom, enable an increasingly intimate learning experience that certainly narrows the gap, at a a fraction of the cost for the host, guest lecturer and students.
  10. There is something special about Stanford – its’ global brand power. The ability to charge a premium price for global learning, to attract globally re-known lecturers and a culturally diverse group of students. I learn more than the students at these events and I can highly recommend it to others.

© James Berkeley 2016. All Rights Reserved.